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Vafeas Inc.'s capital structure consists of 100% common equity, its beta is 1.60, and its tax rate is 40%. However, the CFO thinks the company

Vafeas Inc.'s capital structure consists of 100% common equity, its beta is 1.60, and its tax rate is 40%. However, the CFO thinks the company could use some debt, and he is considering moving to a capital structure with 40% debt and 60% equity. What will the companys new beta be if the change is made?

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